The Big Picture The DJIA has been leading the market lower and this past week it looks like the rest of the indices have finally taken the hint. Since the S&P has lagged and only this past week turned down after yet another all time high, it makes for a good example of how bad (or good) things may get. Using SPY levels, the next few weeks will be taking their cue from the key levels on this chart. Above 426, all bearish bets are off. Below 404 an acceleration down will be imminent. For now, an initial short position is in place, to be added to or taken off based upon a break below 404 or a rise above 426. Trading Positions Premium: SPY July 16th $415P (bought Jun 18th @ 5.20; currently 7.32) Pro: DIA July 16th $335P (bought Jun 17th @ 4.15; currently 7.20) Tesla (TSLA) The tables below show virtually exponential growth in all of the key fundamental measurements, revenues, profits and production. In about a month these numbers will be expanded by Q2 (2021) and paraded out all over the financial media. Stock price will follow, or will have already anticipated good earnings (as has historically been the case) and peak on earnings day or soon thereafter, probably $100 or more higher than current prices. That dip, should it occur, can be bought, but likely at a higher price than today. The takeaway for our purposes is that TSLA's price and market capitalization are going much higher, if not now, then, "now" and "then" being moving target adverbs. In the fullness of time, whether now or then will be inconsequential. One more dip into the $500's, coincident with a market meltdown is possible. An ultimate doubling in price in the next year, probable. Then another double into mid-2023. That takes my price targets to $1,200 in 12 months, $2,400 in two years. If those targets are hit, what difference will it make if the shares/LEAPS were bought at $500, $600 or $700? For specific strategies see June 10th post: TSLA: Long-Term Price Projection & Strategies Pattern Recognition Price Charts The difference in the two charts is that the first one assumes the Wave 4 correction is over and TSLA takes off in a Wave 5 now. A break above the $650 confirms this scenario. The second chart allows for one more dip into the $500's, likely coincident with a declining market over the next 6-8 weeks. In both charts, the target is $2,400 or higher by June 2023. Bitcoin Bitcoin is caught up in a global scope of nonstop recognition as a decentralized store of value and in some cases as a form of currency. So why isn't price rising along with all of this adoption and recognition? As bullish as I continue to be on Bitcoin and Ethereum, that question needs to be answered. Price action will speak louder than words. This coming week should see some kind of short or intermediate term low in advance of a new leg higher.
